Strategy first or performance first?

In today's increasingly fierce competition in the foreign trade market, the internal management of small and medium-sized enterprises has encountered severe challenges. Although the performance appraisal indicators of each department were formulated at the beginning of the year, they are often not guaranteed to be completed. Once the investigation is carried out, the sales department complains that the product quality is unstable and affects sales; the production department complains that the order changes greatly; the purchasing department complains that the payment cannot be paid in time; Insufficient...why does performance appraisal become "chicken ribs"? How should the company's strategic goals be formulated? What kind of performance management can ensure the realization of strategic goals? How can the assessment be more effective?

On the afternoon of July 16, more than 40 manufacturing entrepreneurs and managers gathered at Langham Place Xiamen with these questions and participated in the "From Strategy Formulation to Performance Target Decomposition" organized by "CEConlines". "Salon event. Zhan Yiming, General Manager of Sales of Global Sources South China, delivered a warm welcome speech. Under the guidance and inspiration of Wu Yuguang, a strategic performance expert and founder of Zhonghe Zhengdao Management Consulting Co., Ltd., through group discussions and role-playing, he sought to find the differences between their respective companies for these issues. s solution.

Why is performance appraisal strategy first?

Strategy is the direction of enterprise development. "Enterprise strategic planning" refers to formulating and implementing strategies according to the external environment of the enterprise and its own conditions and changes, and based on the evaluation and feedback of the implementation process and results. The process of adjusting and formulating new strategies. The "CEConline" survey found that 70.5% of domestic enterprises lack an effective strategic control system, especially the key strategic points are unclear. Since the financial crisis, the business environment of Chinese enterprises has undergone great changes. Facing the complex and ever-changing economic situation, both business operators and senior managers need to improve their strategic planning capabilities to cope with new challenges.

When we visited Xiamen enterprises in the early stage of the salon, we found that there are still many business owners today who have great misunderstandings about strategic performance management. Not humanized management. Although they have been in business for more than ten years, some bosses still have the tendency of personal heroism. They do not pay attention to the initiative and satisfaction of employees, and believe that they can make the enterprise well by relying on their own abilities. But when the enterprise develops to a certain level, the boss can't be busy even if he has three heads and six arms, and it needs to rely on the standardization of management and the active participation of every member of the team to do well. This is why we choose "strategic performance" as the topic of discussion in the salon today. .

How to strategize?

Through the salon's preliminary research, we learned that when the participating Xiamen enterprises set their sales targets for the year, 22% of them took the performance reported by the sales staff as the basis, and reached the conclusion after internal negotiation and adjustment. For the annual target, 45% of the companies set the current year's target mainly based on the company's performance development trend in the past few years. The most prominent problem encountered by salon participants in the past performance goal setting is that they do not know what scientific and systematic method to use to formulate strategic goals, and the second is how to implement performance and improve team execution.

Strategy-based performance management is a complex and meticulous work, which is not only related to the formulation of corporate strategies, but also involves the specific work of each employee of the company, as well as corporate culture, personnel quality, etc. have a close relationship. In this regard, expert Wu Yuguang said: "What is lacking in enterprises? I personally think that small enterprises lack methods, and large enterprises lack systems. To start a business, you must first consider who I am? You need to know what resources, advantages, and shortcomings you have; where am I? ——You have to know your position in the industry. If the company has a weak position in the industry and still adopts a low-end strategy, it will be difficult to do it; how do I go? Many bosses are not clear when setting goals , in many cases, the boss beats his head. Everyone needs to analyze where you are, how the industry is growing, how is the competition situation, and how is it compared to last year. In addition to the goal, there is another point about why we achieve this goal.”

Performance makes strategy come true

Effective performance management can make strategic goals well realized, then, how to make strategic goals come true through performance management? The enterprise representatives at the scene were divided into 7 groups and conducted a vivid strategic performance exercise through the analysis of specific cases. On this "battlefield" without gunpowder smoke, the team members of each team discussed the process of goal formulation and decomposition by assigning roles and starting from the cooperation of different departments.

When commenting on the performance of each team, Wu Yuguang pointed out that except for the seventh group that failed to complete the plan within the specified time, the solutions proposed by each other team have their own characteristics. , full of wisdom and creativity. In fact, within the enterprise, after the strategy is established, it is also very important to let the strategic goals penetrate into the hearts of every employee through effective communication.

After that, Mr. Wu explained in detail how the company in the case communicated strategic goals from top to bottom, and then decomposed performance indicators from bottom to top and reached an agreement.

The first step is to clarify the strategy and unify the thinking. A very important strategy for SMEs is to focus, innovate overseas sales models, and combine local resources and services. Improve the combat capability of overseas teams, increase the research and development of product planning, and provide more competitive products and solutions. Then stick to the profit orientation. You can't simply assess the income of the salesperson. The salesperson dumps at a low price, and then he takes a commission, so that he loses money even if he does not make a profit. This is not the case, the more you contribute, the better we can improve. There is also a foundation to be consolidated.

The second step is to adjust the structure. By streamlining the structure, emphasis is placed on the commanding efficiency of functions.

The third step is to adjust the salary. It used to be the same as doing more and less, but now it's different. The manager of each department has made such an explanation, letting him know how much money is spent doing well and how much money is not doing well.

The fourth step is to set goals. This goal has both the company's goal and the department's index, and different positions are different, and 30% are flexible, because the situation was not clear at the time, leaving some subjective evaluations. The indicators of the department should be combined with the work of the department.

The fifth step is to change the strategy. To talk about performance indicators, it is necessary to change to end customers. From product marketing to program marketing.

The sixth step is to make a plan. Only by turning these initiatives into actions can the goals be actionable.

The seventh step is to strengthen the system, grasp the two ends, solidify the middle, and get through the five lines. The solid middle is the on-site management, opening up five lines. First, product line; second, quality line; third, production and sales line; fourth, service line; fifth management line. These five lines serve as a method of overall internal management.

The eighth and final step is to evaluate advanced. Finally, there must be a fair evaluation of the performance of the employees.

Mr. Wu believes that in strategic performance management, target segmentation is a common misunderstanding. From target formulation to target decomposition, there is a lack of strategic guidance. Performance management is originally a tool for strategy implementation. Many companies regard it as the work of the human resources department. The human resources director or manager is responsible for the performance management of the whole company, which makes the human resources department very embarrassed. On the one hand, they don’t have enough understanding of strategy and authority, so they can’t get the understanding of the business department when doing decomposition, which can easily lead to poor performance management. The person in charge is assessed, so that the business department does not buy the assessment indicators and results.

In the sharing session of Zhihui, Yao Ming, chairman of Yao Ming Ribbon, the company representative from Xiamen, Jia Qiang, chairman of Donglin Electronics, and Chen Jueyuan, general manager of Oulamp Electronics shared their experience in Doing more distinctive experience in business management. Among them, Yao Ming Ribbon's sales team has undergone three major changes in performance appraisal at different stages of enterprise development: the first stage is low base salary and high commission, the second stage is individual performance management by region, and it has now entered the team performance appraisal stage. Jia Qiang of Donglin Electronics talked about the strategy of product innovation and the difficulties encountered in its implementation; Mr. Chen introduced that in order to do a good job in the health industry strategy, Oulamp invests up to 6 to 7 million in research and development every year, and also carefully plans the competition strategy of different products And so on, these valuable experiences from the entrepreneurs' front-line combat have inspired many entrepreneurs and executives who participated in the salon.

In just three and a half hours, the participants not only actively participated in the case discussion, but also listened carefully to the sharing of experts and successful entrepreneurs. Assistant Manager Zhang Hongmei said that such peer exchanges are very effective and have a rare opportunity. She has learned a lot of practical management knowledge, which she hopes to prove in future practice. Some participants also reported that the course time was too tight and not enough fun. Through this salon discussion, most of the participants felt that the effect of the salon was good and benefited a lot. After listening, they had a lot of new ideas. I hope that "CEConline" will hold more such management salons for them in the future.